With the highway infrastructure deteriorating the way it is and with all the congestion around every major city. Why does the government seem to just “turn their heads” the other way from trucking? Or at least it seems that way. The government wants to sink billions of dollars into the rail system and minimal money into the highways.
It boils down to – highways are crowded because our major cities have inadequate mass transit systems and poorly planned real estate development. Who has the biggest influence on the money to be spent on trucking and rail systems – politicians. How is this tied together, you ask? You need to follow the money trail in order to see the answer to that question.
You first must realize who is in control of mass transit systems and our real estate planning. Who is in real control of the politicians? Real Estate Developers who direct the campaign contributions of the real estate industry employees to the politicians who then ensure access to land they own; and deny access to the land they don’t own. The largest contributors are the real estate developers and they have a lot of control over what the politicians do.
The reason is this, residential development is the most lucrative way to make a lot of money off a little land. Here’s an example; Owning 350 acres of land in central Ohio is valuable (one farm is going for $980,000 in Thurman OH right now). BUT, being able to sell each 1/4 section of those 350 acres for two hundred and fifty thousand dollars (the cost of a typical home around Washington, DC) is extraordinarily valuable [350 x 4 x $250,000 = $350,000,000]. The biggest real estate developers in the D.C. area own thousands of acres with a potential value of $1,000,000 per acre and that puts them in the Billionaire’s Club.
To stay in the Billionaire’s Club, the Real Estate Developers encourage all the real estate development workers they employee, directly and indirectly – construction, plumbing, electrical, hauling, road building, sales, etc. – to contribute to those politicians the Real Estate Developers have developed relationships with whom spend the taxpayers money on new roads to provide access to the land the developers own and where the new houses will be built. And it is all pretty much completely legal. Politicians control zoning and road or rail access and in exchange they get donations they use to get re-elected.
The same is true of the railroads, but with a twist. The railroads compete with trucking directly for a portion of the freight market. Railroads only want to have trucks carry the short haul loads in the US, with Railroads owning all the long haul business. Normally, the “market” would determine if Railroads deserve to “own” the long distance freight business if they could prove they are more efficient than Trucking.
Unfortunately for the railroads, the market has already decided that trucks are more efficient for the high value items needed in small locations throughout the US. Railroads are great at hauling massive amounts of coal, sand or wheat, but they are not so good at delivering six cars to the Toyota dealership in Richmond, VA from Kentucky by next Tuesday.
So the Railroads cheat a little bit. They have something the Real Estate developers want – a means to move lots of commuters from the 1/4 acre lots that make developers rich to the high paying jobs in the city centers that taxpayers will stupidly support – rail lines. And they trade their established rail lines to the real estate developers for the influence the developers have with politicians.
The railroads get the politicians to delay and study new rail routes while at the same time the politicians don’t do anything that will really relieve traffic congestion on the highways. Even the HOT lane program in the DC area is actually designed to benefit the real estate development arm of Flour-Transurban who are planning to put in 20,000 houses along the new HOT lane routes in Virginia. It isn’t supposed to relieve congestion, the HOT lanes are to make it possible for Flour-Transurban to get permits to build the houses.
Because trucking is more efficient for the high end freight hauling business, the competition between trucks and rail is rigged and truckers don’t have the financial resources to compete in the game by out contributing to the politicians. And those politicians are not going to admit they allow traffic congestion to get worse and worse simply to decrease the efficiency of the trucking industry.
Stay tuned to see what develops as more research is done, I guarantee you it is going to get very interesting.
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